Post on 22-Jun-2020
© 2020 CEM Benchmarking Inc.
Investment Benchmarking Service A benchmarking solution for your DB plan
CEM Pension Administration Benchmarking Analysis
Iowa Public Employees’ Retirement System
March 23, 2020
Michael Reidmichael@cembenchmarking.com
+1 (416) 644-2516
Key Takeaways:
Cost
•
• Your total pension administration cost per active member and annuitant increased 1.2% per annum.
• You remain one of the lowest cost systems in the CEM database.
Service
•
• Over the past 8 years your service score remained relatively stable. Improvements were made on your website and
newsletters & targeted communication.
Your total pension administration cost of $53 per active member and annuitant was $45 below the peer average of $98.
Your total service score was 80. This was below the peer median of 83. You have a very high scoring peer group,
including 6 out of the 10 top scoring systems in the CEM's database.
© 2020 CEM Benchmarking Inc. Executive Summary 1
72 leading global pension systems participate in the benchmarking service.
Participants
United States STRS Ohio The Netherlands* United Kingdom*
Arizona SRS Texas MRS ABN Amro PF Armed Forces PS
CalPERS TRS Illinois ABP BSA NHS Pensions
CalSTRS TRS Louisiana bpfBOUW BT Pension Scheme
Colorado PERA TRS of Texas BPF Levensmiddelen Lothian Pension
Delaware PERS Utah RS BPL Pensioen Greater Manchester PF
Florida RS Virginia RS Metaal en Techniek Local Pensions Partnership
Idaho PERS Washington State DRS PF PWRI Merseyside PF
Illinois MRF Wisconsin DETF PF Vervoer Pension Protection Fund
Indiana PRS PFZW Principal Civil Service
Iowa PERS Canada Rabobank PF Railways Pension Scheme
KPERS Alberta Teachers’ RF Shell PF Royal Mail Pensions
LACERA APS South Yorkshire PF
Maryland SRPS BC Pension Corporation Teachers' Pensions
Michigan ORS Canadian Forces PP Tyne & Wear PF
NYC ERS FPSPP USS
NYC TRS LAPP West Midlands Metro
NYSLRS OMERS West Yorkshire PF
Ohio PERS Ontario Pension Board
Oregon PERS Ontario Teachers
Pennsylvania PSERS OPTrust
PERS Nevada RCMP
PSRS PEERS of Missouri SHEPP
South Dakota RS
* Systems in the UK and most systems in the Netherlands complete different benchmarking surveys and hence your analysis does not include their results.
© 2020 CEM Benchmarking Inc. Executive Summary 2
Custom Peer Group for [NAME]
Washington State DRS 330 194 524
Wisconsin DETF 258 209 467
Indiana PRS 252 160 412
STRS Ohio 210 160 370
Arizona SRS 208 155 363
Colorado PERA 242 121 362
Oregon PERS 177 152 329
Illinois MRF 177 132 308
Iowa PERS 172 124 296
PSRS PEERS of Missouri 128 95 223
NYC TRS 129 93 222
TRS Louisiana 92 81 172
Peer Median 192 142 346
Peer Average 198 140 337
Inactive members are not considered when selecting peers because they are excluded when
determining cost per member. They are excluded because they are less costly to administer
than either active members or annuitants.
The custom peer group for Iowa PERS consists of the following 12 peers:
Custom Peer Group for Iowa PERS
Peers (sorted by size)
Active
Members Annuitants Total
Membership (in 000's)
© 2020 CEM Benchmarking Inc. Executive Summary 3
Category You You Peer Avg
Front office
Member Transactions 1,202 4 13
Member Communication 2,532 9 16
Collections & Data Maintenance 1,607 5 7
Governance and support
Governance and Financial Control 850 3 8
Major Projects 3,034 10 11
Information Technology 4,611 16 25
Building 757 3 7
Legal 401 1 3
HR, Actuarial, Audit, Other 704 2 9
Total Pension Administration 15,698 53 98
$ per Active
Member and
Annuitant
$000s
Your total pension administration cost of $53 per active member and annuitant was $45
below the peer average of $98.
$0
$50
$100
$150
$200
$250
$300
$350
$400
$450
Pension Administration Cost Per Active Member and Annuitant
You Peer All Peer Avg All Avg
© 2020 CEM Benchmarking Inc. Executive Summary 4
Reasons why your cost per member was $45 below the peer average:
Impact
Reason You Peer Avg$ per active member
and annuitant
1 Fewer front-office FTE per 10,000 members 1.5 FTE 3.7 FTE -$29
2 Lower third party costs per member in the $4 $5 -$1 front-office
3 Higher costs per FTE
Salaries and Benefits (Incl. retiree benefits) $106,415 $97,967
Building and Utilities $12,088 $11,718HR $2,105 $3,782IT Desktop, Networks, Telecom $14,676 $14,382Total $135,284 $127,849 $4
4 Lower support costs per member¹Governance and Financial Control $3 $9Major Projects $10 $11IT Strategy, Database, Applications $14 $19Actuarial, Legal, Audit, Other $4 $11Total $31 $50 -$20
Total -$45
1. To avoid double counting, peers' Governance and support costs are adjusted for differences in cost per FTE.
© 2020 CEM Benchmarking Inc. Executive Summary 5
Cost Trends
Between 2012 and 2019:
Your total pension administration cost per
active member and annuitant increased 1.2%
per annum.
During the same period, the average cost of
your peers with 8 consecutive years of data
increased 0.9% per annum.
Trend analysis is based on systems that have provided 8 consecutive years
of data (11 of your 12 peers).
You remain one of the lowest cost systems in
our database.
$0
$20
$40
$60
$80
$100
$120
2012 2013 2014 2015 2016 2017 2018 2019
You $49 $45 $54 $45 $53 $55 $51 $53
Peer Avg $94 $94 $98 $103 $104 $101 $99 $100
Trend in Total Pension Administration Costs
© 2020 CEM Benchmarking Inc. Executive Summary 6
Activity Weight You Med Avg
1. Member Transactions
a. Pension Payments 10.0% 100 100 100 0.0
b. Pension Inceptions 7.4% 88 90 82 0.4
c. Refunds & Transfers-out 1.3% 100 95 80 0.3
d. Purchases & Transfers-in 3.1% 92 88 81 0.3
e. Disability 3.8% 90 86 88 0.1
2. Member Communication
a. Call Center 21.0% 78 77 71 1.5
c. 1-on-1 Counseling 7.4% 97 88 87 0.7
d. Member Presentations 6.5% 49 100 94 -2.9
e. Written Pension Estimates 4.7% 93 93 86 0.3
f. Mass Communication
• Website 21.3% 76 86 80 -0.9
• News & targeted communication 2.8% 83 81 82 0.0
• Member statements 4.7% 91 88 82 0.4
3. Other
Customer Experience Surveying 5.0% 25 39 42 -0.9
Disaster Recovery 1.0% 100 98 92 0.1
Weighted Total Service Score 100% 80 83 81 -1.0
Your total service score was 80. This was below the peer median of 83.
Service Scores by Activity
PeerImpact
relative
to peers
Higher service is not necessarily cost-effective. For example,
the ability to answer the telephone 24 hours a day is higher
service, but not cost effective.
Service is defined from a member’s perspective. Higher service
means more channels, faster turnaround times, more
availability, more choice, better content and higher quality.
0
10
20
30
40
50
60
70
80
90
100Total Service Score
You Peer AllPeer Median All Median Peer Avg
© 2020 CEM Benchmarking Inc. Executive Summary 7
Select Key Service Metrics You Peer Avg
Member Contacts
• % of calls resulting in undesired outcomes (busy signals, messages, hang-ups) 8% 11%
• Average total wait time including time negotiating auto attendants, etc. 37 secs 200 secs
Website
• Can members access their own data in a secure environment? Yes 92% Yes
• Do you have an online calculator linked to member data? Yes 92% Yes
• # of other website tools offered such as changing address information, registering
for counseling sessions and/or workshops, viewing or printing tax receipts, etc.
13 15
1-on-1 Counseling and Member Presentations
• % of your active membership that attended a 1-on-1 counseling session 4.9% 4.9%
• % of your active membership that attended a presentation 1.2% 7.0%
Pension Inceptions
• What % of annuity pension inceptions are paid without an interruption of cash
flow greater than 1 month between the final pay check and the first pension
100.0% 90.2%
Member Statements
• How current is an active member's data in the statements that the member 3.0 mos 2.3 mos
• Do statements provide an estimate of the future pension entitlement? Yes 75% Yes
Examples of key service measures included in your Service Score:
© 2020 CEM Benchmarking Inc. Executive Summary 8
Changes that have had a positive impact:
•
•
Changes that have had a negative impact:
•
Your total service score stayed relatively stable between 2012 and 2019.
Historic scores have been restated to reflect changes in
methodology. Therefore, your historic service scores may differ
from previous reports.
Trend analysis is based on systems that have provided 8
consecutive years of data (11 of your 12 peers and 35 of our 47
systems in the universe).
Website: Over the past 8 years you've added a
number of online transactions, such as a service
credit purchase calculator, changing a beneficiary,
downloading or printing a duplicate tax receipt and
the option to register for presentations.
Newsletters: You now offer 4 targeted newsletters to
different segments. In 2018 you started sending out
personalized letters when members' disability
benefits expire.
Presentations: Your % of attendees as a percent of
active members decreased from 2.6% to 1.2%.
50
55
60
65
70
75
80
85
90
2012 2013 2014 2015 2016 2017 2018 2019
You 80 76 78 78 79 80 82 80
Peer Avg 76 76 77 79 79 81 80 80
All Avg 72 73 74 75 76 78 78 77
Trends in Total Service Scores
© 2020 CEM Benchmarking Inc. Executive Summary 9
The relationship between service and pension administration cost in the CEM universe:
-30
-20
-10
0
10
20
30
-$200 -$100 $0 $100 $200 $300 $400
Re
lati
ve S
erv
ice
= Se
rvic
e S
core
-A
ll A
vera
ge S
core
Relative Admin. Cost =Admin. Cost - All Average Admin. Cost
Relative Service versus Relative Cost
All Peers You
© 2020 CEM Benchmarking Inc. Executive Summary 10
Key Takeaways:
Cost
•
• Your total pension administration cost per active member and annuitant increased 1.2% per annum.
• You remain one of the lowest cost systems in the CEM database.
Service
•
•
Your total pension administration cost of $53 per active member and annuitant was $45 below the peer average of $98.
Your total service score was 80. This was below the peer median of 83. You have a very high scoring peer group,
including 6 out of the 10 top scoring systems in the CEM's database.
Over the past 8 years your service score remained relatively stable. Improvements were made on your website and
newsletters & targeted communication.
© 2020 CEM Benchmarking Inc. Executive Summary 11